New Zealand is focusing its defense policy firmly on its own back yard: the South Pacific. In doing so, it has accused the United States of turning its back on the region and handing the propaganda advantage to the Soviet Union, which is striving to increase its influence.

China and, more recently, Japan are also paying unprecedented attention to the South Pacific and its small island nations.

The moves follow a shake-up in regional security after the US split with New Zealand over the Labour government's uncompromising antinuclear policies. Washington suspended its security commitment to New Zealand because of Wellington's refusal to accept US nuclear ship visits. It also declared the ANZUS treaty - linking the US, New Zealand, and Australia and forming the cornerstone of Western collective security in the region since 1951 - inoperative as far as the US and New Zealand are concerned.

In a move only partially related to New Zealand's policies, 10 of the island nations last year declared the South Pacific a nuclear-free zone. They invited the nuclear powers to sign protocols agreeing not to use, test, or deploy nuclear weapons in the region.

The island nations went to great efforts to get US backing in this effort, and the South Pacific Nuclear-Free Zone Treaty does not bar the passage of nuclear ships or prevent them from making port visits to signatory countries.

The Soviet Union rushed to sign, followed by China. But the US, which did sign the Treaty of Tlatelolco in 1967 declaring Latin America nuclear-free, would not. Britain is expected to follow the US as a dissenter. France can hardly sign, because it is still conducting underground nuclear tests in its Pacific territory.

The US's refusal angered the Pacific countries, including Australia (still a working member of ANZUS), which had taken the initiative. New Zealand's rejection of the American nuclear umbrella under ANZUS has worried many of the island states, who fear it weakens Western security in the region.

But in drawing up its new independent defense strategy, based on greater self-reliance and focusing on the South Pacific, the government of Prime Minister David Lange has firmly rejected both armed or unarmed neutrality and nonalignment.

It says New Zealand remains committed to the Western alliance (despite Washington's doubts) and can best make its contribution not by blind subservience to global nuclear strategies, but by helping maintain the peace and promoting collective security in this part of the world.

But safeguarding the security interests of New Zealand, let alone those of the West, in this vast region without a superpower's umbrella is an awesome task for an isolated nation of 3.3 million people with a fragile agricultural economy and military strength of only 13,000 troops.

The government has defined New Zealand's area of direct strategic concern as ranging, south to north from Antarctica to Kiribati on the equator and west to east from western Australia to the Cook Islands - some 16 percent of the globe.

Closer to home, New Zealand has to protect a fishing zone around its coastline encompassing 1.4 million square nautical miles, one of the world's largest.

But the government recognizes that greater self-reliance does not mean self-sufficiency, and bilateral defense links with neighboring Australia not only continue despite the ANZUS rift, but have acquired paramount importance. Both sides have made it clear there will be no dependent relationship. Australia will not replace the US as major security partner or fund the extra costs to be faced.

It is here that Lange's government has run into difficulties with what he has called ``the most fundamental change in defense policy since World War II.''

A recent defense white paper, prepared by the government in conjunction with the Defense Ministry, acknowledged that America's withdrawal of military cooperation and intelligence, in retaliation for the antinuclear policy, hurt the New Zealand armed forces, and, together with the drive for greater self-reliance, would require additional defense spending.

But Mr. Lange says the government (restrained by economic troubles and Labour's left wing) does not plan to increase the current level of defense expenditures: about $550 million, or 2 percent of the gross domestic product.

The government has already hiked defense spending, buying an oil tanker for the Navy, new rifles, and field guns for the Army and a $77 million increase for the Air Force's Skyhawks.

The white paper proposed the purchase of a new supply vessel and new ships in the 1990s to replace the Navy's British-built frigates with craft better suited to Pacific conditions. It also announced the Air Force's first air-to-air refueling system and new training aircraft. All this will please the military, which remains less than delighted with the antinuclear policy that has cost the armed forces their traditional ties with the US. The equipment still has to be paid for. The government says there are ways, including selling off redundant military bases on prime real estate.

But opponents of government policy who hanker for the old days of ANZUS collective security are concerned that self-reliance will mean having a reduced defense capability at a much higher, as yet unspecified, cost. New Zealand still has to convince its neighbors that this is not so and that it can live up to its pledge to help maintain the regional peace.

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